Omnicom Group Inc. $OMC Shares Sold by California State Teachers Retirement System

Key Points

• California State Teachers Retirement System reduced its Omnicom stake by 2.5%, selling 13,488 shares and retaining 532,308 shares worth about $40.1 million. Institutional investors collectively own approximately 91.97% of the company.
• Omnicom reported quarterly revenue of $6.56 billion, up 63.4% year over year and above estimates, but EPS of $2.65 narrowly missed expectations. The company declared a quarterly dividend of $0.80 per share, implying a 4.1% annualized yield.
• Analyst sentiment remains mixed, with four Buy, five Hold and one Sell rating and an average price target of $99 versus a share price near $78.86. Potential growth from data analytics and merger synergies is balanced by concerns over debt, integration costs and margin pressure.

California State Teachers Retirement System cut its position in Omnicom Group Inc. (NYSE:OMC - Free Report) by 2.5% in the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 532,308 shares of the business services provider's stock after selling 13,488 shares during the quarter. California State Teachers Retirement System owned approximately 0.19% of Omnicom Group worth $40,088,000 at the end of the most recent quarter.

A number of other hedge funds have also recently added to or reduced their stakes in OMC. Vanguard Group Inc. lifted its position in Omnicom Group by 64.2% in the fourth quarter. Vanguard Group Inc. now owns 38,934,118 shares of the business services provider's stock valued at $3,143,930,000 after purchasing an additional 15,220,444 shares during the period. State Street Corp boosted its holdings in Omnicom Group by 40.4% in the 4th quarter. State Street Corp now owns 23,676,768 shares of the business services provider's stock valued at $1,933,891,000 after purchasing an additional 6,813,441 shares in the last quarter. Bank of New York Mellon Corp increased its position in Omnicom Group by 7.2% during the 1st quarter. Bank of New York Mellon Corp now owns 12,098,191 shares of the business services provider's stock worth $911,115,000 after purchasing an additional 814,328 shares during the period. Geode Capital Management LLC increased its position in Omnicom Group by 57.1% during the 4th quarter. Geode Capital Management LLC now owns 8,578,075 shares of the business services provider's stock worth $690,327,000 after purchasing an additional 3,117,188 shares during the period. Finally, Massachusetts Financial Services Co. MA raised its stake in shares of Omnicom Group by 5.8% during the 4th quarter. Massachusetts Financial Services Co. MA now owns 7,870,437 shares of the business services provider's stock worth $635,538,000 after buying an additional 433,461 shares in the last quarter. Hedge funds and other institutional investors own 91.97% of the company's stock.

Omnicom Group Stock Down 0.9%

Shares of NYSE OMC opened at $78.86 on Friday. Omnicom Group Inc. has a 52-week low of $66.33 and a 52-week high of $87.41. The firm has a fifty day moving average of $77.29 and a 200-day moving average of $76.89. The stock has a market capitalization of $21.64 billion, a PE ratio of 67.98, a P/E/G ratio of 0.53 and a beta of 0.63. The company has a quick ratio of 0.77, a current ratio of 0.92 and a debt-to-equity ratio of 0.97.

Omnicom Group (NYSE:OMC - Get Free Report) last released its quarterly earnings data on Tuesday, July 28th. The business services provider reported $2.65 earnings per share (EPS) for the quarter, missing the consensus estimate of $2.67 by ($0.02). Omnicom Group had a return on equity of 24.73% and a net margin of 1.74%.The business had revenue of $6.56 billion for the quarter, compared to analysts' expectations of $6.44 billion. During the same quarter in the prior year, the firm earned $2.05 earnings per share. Omnicom Group's quarterly revenue was up 63.4% compared to the same quarter last year. On average, analysts anticipate that Omnicom Group Inc. will post 10.35 EPS for the current year.

Omnicom Group Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, October 9th. Stockholders of record on Friday, September 18th will be given a dividend of $0.80 per share. This represents a $3.20 dividend on an annualized basis and a dividend yield of 4.1%. The ex-dividend date is Friday, September 18th. Omnicom Group's dividend payout ratio is presently 275.86%.

Wall Street Analysts Forecast Growth

Several equities research analysts have commented on OMC shares. The Goldman Sachs Group started coverage on shares of Omnicom Group in a research report on Wednesday, June 3rd. They set a "buy" rating and a $146.00 target price on the stock. Weiss Ratings upgraded shares of Omnicom Group from a "hold (c-)" rating to a "hold (c)" rating in a report on Thursday. Citigroup reduced their price objective on shares of Omnicom Group from $105.00 to $100.00 and set a "buy" rating for the company in a research note on Thursday. Morgan Stanley boosted their price objective on shares of Omnicom Group from $82.00 to $83.00 and gave the stock an "equal weight" rating in a report on Friday, May 1st. Finally, Wells Fargo & Company upped their target price on shares of Omnicom Group from $91.00 to $93.00 and gave the stock an "overweight" rating in a research report on Thursday. Four analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Hold" and an average price target of $99.00.

Omnicom Group News Roundup

Here are the key news stories impacting Omnicom Group this week:

• Positive Sentiment: Wells Fargo raised its price target for Omnicom Group to $93 from $91 and maintained an “overweight” rating, citing potential upside from the company’s operating outlook. Wells Fargo price-target update
• Positive Sentiment: Citigroup lowered its target to $100 from $105 but retained a “buy” rating. The reduced target still implies substantial upside and suggests analysts view the recent weakness as an opportunity rather than a fundamental break in the investment case. Citigroup price-target update
• Positive Sentiment: Analysts highlighted Omnicom’s data and analytics investments, integrated media capabilities and merger-related cost synergies as potential drivers of longer-term revenue growth and profitability. Omnicom data and analytics outlook
• Neutral Sentiment: Omnicom’s latest quarter produced $6.56 billion in revenue, above the $6.44 billion consensus and up 63.4% year over year, while EPS of $2.65 narrowly missed the $2.67 estimate. The mixed result helps explain why strong sales growth has not translated into a clear stock catalyst. Omnicom Q2 earnings call highlights
• Neutral Sentiment: International revenue remains an important factor in Wall Street’s forecasts, making foreign-market performance and currency or regional risks relevant to the stock’s outlook. Omnicom international revenue analysis
• Negative Sentiment: Investors remain concerned about higher debt, integration expenses and margin pressure following the merger. Analysts have also trimmed estimates, creating uncertainty over how quickly anticipated synergies will improve earnings. Omnicom valuation analysis
• Negative Sentiment: Some commentary argues that OMC’s valuation and recent multiyear gains leave the shares vulnerable to profit-taking if organic growth or post-merger execution disappoints. Omnicom valuation commentary

About Omnicom Group

Omnicom Group Inc NYSE: OMC is a global marketing and corporate communications holding company headquartered in New York City. Founded in 1986 through the merger of the BBDO, DDB and Needham Harper agencies, Omnicom has built a portfolio of leading brands and networks serving clients across diverse industries.

The company's primary business activities encompass advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and customer relationship management.

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